For reasons of ideological conviction, the president Javier Milei believes that there should be no public works, since that would be an issue that should be taken care of by the private sector. In this context, and with the proposal of making a fiscal adjustment, real direct investment fell 84.4% between January and May of this year.
This is data from the consulting firm Politikon Chaco based on official information. According to the report, in the first five months of the year, Spending on public works totaled $90,918 million.
“The constructionswhich represent 67% of real direct investment, show a real year-on-year drop of 86.1%”, details the report.
According to that work, The decline in real direct investment actually began in September 2023, when it had a drop of 7.6%, to recover 7.1% in October, although it lost positions again in November and December.
However, Politikon Chaco considers that This year “the aggravating factor is that the declines were very deep.” The peak decline is observed in January 2024, with -95.3%, and, except for February (-74.1%), in the rest of the months of the year, the decline was greater than 80% real year-on-year.
In relation to Constructions, in September 2023, began a decline that continued until May. “In this case, the peak decline is observed in March with 93% real year-on-year,” indicates the study.
Real direct investment by provinces
The report indicates that “Buenos Aires, City of Buenos Aires, Entre Ríos, Río Negro and Córdoba explain 62.7% of the total executed, but with clear dominance of the first two, which account for 45.3%.” At the other end, “Formosa, Chubut and La Rioja show the lowest levels of participation in the execution of real direct investment (0.3%, 0.2% and 0.2% of the total, respectively).”
“In terms of year-on-year performance, although there are gaps in results by district, the outlook is mostly one of sharp decline,” says the study. The work indicates that eleven of the districts fell above 84.4% and the remaining eleven did so to a lesser extent. While only two presented increases.
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First of all, the provinces stand out with real expansion: these were Jujuy (+52.9%) and Tierra del Fuego (41.6%).
In both cases, the rise is largely based on a very low comparative base, since both provinces They had been those that presented the lowest levels of investment, measured in pesos, in the period January-May 2023. This is mainly verified in the Construction section.
Luis Caputo said that he is not going to put more money into public works
The Minister of Economy, Luis Caputo reiterated that the national government will not finance more public works because “it is a mess” and he suggested they give them to the provinces because “it was a job.”
“They gave the provinces public works that “It’s a job”stated the minister, while maintaining that “They are coming (by the governors) to request the transfer and that’s how it should be.”
Caputo expressed these concepts within the framework of the meeting organized by the Libertad y Progreso Foundation that took place in the City of Buenos Aires at the Hilton Hotel.
Governors are absorbing public works
“They are coming to ask that we give them the works and the Chief of Staff, Guillermo Francos is signing the transfer every day and that is how it should be,” said the minister.
Along these lines, he insisted that “discretionary transfers will remain at zero”a tool that was usually used as a political condition.
In relation to the relationship, they are the subnational states. Caputo revealed that “last week several governors came to see me and, I apologize if I send them to the front, they have a smile from ear to ear.”
At that moment, he took the opportunity to target the president of the province of Buenos Aires, Axel KIcillof: “with the exception of the province of Buenos Aires, where we have a serial spender, everyone is happy,” Caputo added.
Source: Ambito
